Hong Kong Law Journal 1971 - 2018

Vol. 42, Part 1 of 2012

An announcement was published in the South China Morning Post on 20 January 2012 at the lower left hand corner of page C4. It was a notice of the death of William James (Bill) Silke, barrister at law, "[sometime] Judge of North Borneo (Sabah), Malaysia and Hong Kong, Lately Judge of the Court of Appeal, Brunei Dar-as-Salam, and the Court of Final Appeal, Hong Kong Special Administrative Region, China", on 17 January 2012.

Following the Court of First Instance's decision in Incorporated Owners of Century Centre v Bank of China (Hong Kong) Ltd [2011] 4 HKC 439, judgment creditors can enforce their judgment by registering a charge over property owned by the judgment creditor, but the registration ceases to have effect after five years. This decision nevertheless suggests that the charge does not then lose all priority. Charges registered later but before registration of the first charge expires will still be subject to it if creditors re-register them.

The recent Court of Final Appeal decision in New World Harbourview Hotel Co Ltd v ACE Insurance Ltd reaffirms the courts' approval of the contextual approach toward the construction of commercial contracts generally, and the importance of clear-cut tests, particularly with regard to determining the scope of indemnity coverage in insurance contracts.

The institutional experience of the Indian Union is quite underestimated by Western legal scholars both in constitutional and globalisation studies. Today it appears necessary and stimulating to reassess the state of Indian constitutional democracy. A first set of considerations of this study concerns the relation between state building and constitutional democracy. After independence India managed to establish a durable state not through coercion or authoritarian routines but through democratic practices. In India the vibrant pluralism of the party system has guaranteed a rich political debate and the representation of wide range of social groups, from linguistic and religious communities to backward social groups. A second pillar of the Indian constitution is its federal system displaying very peculiar features such as the successful policy of inclusion of cultural identities through the creation of the so-called "linguistic states". Such policies have not undermined the consolidation of an Indian identity; on the contrary they have consolidated it, as showed by recent studies. A third subject needing more reflection is the constitutional reform of local self-government occurred in the 1990s, resulting in the "institutionalisation" of rural India and its villages, through a political language more in tune with local traditions and capable to stimulate grass-roots democracy in contrast with the elite democracy typical of the first phase of state building in India. This article tries underline the original approach of the Indian constitution in building a democratic state not through a mere reproduction of the schemes of western constitutionalism but adapting them to the Indian reality to create what is proudly considered by the majority of Indian scholars as a "beautiful patchwork".

Under the current constitution of South Korea, ie the Constitution of the Sixth Republic of Korea of 1988, the nation's political process has been further democratised and stabilised in form and substance, strengthening the foundation for constitutional democracy and embodying constitutionalism, with further constitutional ramifications for enhancing and substantiating fundamental rights protection. At the same time, some of the problems recurring under the institutional arrangement of the current constitution have been observed, including those pertaining to the relationship between the office of the president and the national legislature in setting longer-term policy goals and implementing them through legislation. Interrelated issues of dual legitimacy and the perceived lack of responsiveness and responsibility of the political branches towards the constituency have been at the centre of the discussion of constitutional revision. This article analyses some of the core issues that have been discussed and debated regarding a possible constitutional revision in the Republic of Korea.

Different from the dominant approach in the Chinese constitutional studies which focuses narrowly on constitutional texts, this article examines the party's leadership from the perspective of living constitution. It explores the role of party's leadership in four constitutional areas: the relationship between the party and the congresses, party-court relations, central-local relations and citizens' basic rights. It argues that while the party's leadership is absolute, there remains room for innovation, development and power advancement for other state apparatuses and citizens' rights. This occurs because either the party's own interests so require, or it lacks capacity for effective control. These patterns allow us to understand the current and the future trajectories of China's constitutional development.

Courts and judges have become highly visible in the Asian political landscape as part of a global trend towards the judicialisation of politics. Yet, while there is increased understanding of what is driving this trend, current models do little to explain what courts and judges actually do; nor is there agreement on how judicial behaviour might affect governance. Here I present a typology of judicial politics to support the argument that judicial behaviour over time is an outcome of the interplay between institutional, ideational and agency-specific variables. That is why the effects of judicial decisions on democratic governance are difficult to evaluate. However, the tentative evidence presented here suggests that the relationship is positive primarily in countries where courts have worked to actively facilitate dialogue between different branches of government. This article thus seeks to advance the debate on variances in judicialisation and their effects both empirically and theoretically.

Heritage has two primary functions: to reflect the political and social developments of the past in order to inform the present, and to promote identity and self-awareness. Heritage protection in any city should enjoy a supreme position that takes precedence over development, but this is often not the case. This paper introduces the legal instruments in place for protecting Hong Kong's heritage and analyses their effectiveness and shortcomings. The existing Antiquities and Monuments Ordinance (Cap 53) offers the most comprehensive legal coverage, but to what extent has it achieved its purpose of safeguarding cultural heritage in a city with high land costs and rapid development? This paper not only assesses the effectiveness of Hong Kong's heritage law, but also outlines strategies pursued by the current administration and makes recommendations for achieving greater protection of Hong Kong's heritage.

This article examines how ultra vires state contracts should be treated under international law. Specifically, it will examine what rules of international law should be applied to determine whether an ultra vires state contract is binding on a host state, how they should be applied and the outcome of their application. As background, it is first necessary to introduce the concept of state contracts, the problem of ultra vires state contracts and why international law may be applicable.

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Resolving the Source Problem : A General Review with a Particular Focus on Hong Kong Antonietta Wong

169

CHINA LAW

Economic Development and Cultural Autonomy in Tension:
The Tibet Issue in China's Constitutional Framework Zheng Ge

195

Development of Maritime Limitation of Liability in
China (1993-2011) Kevin X. Li

Vol. 42, Part 3 of 2012

Traditional Chinese forms of communal landholding, t'so and t'ong, are habitually referred to by judges and authors as trusts. This article investigates the basis for this description and examines whether and to what extent the description is legally accurate. It concludes that there is considerable doubt as to whether they really are trusts.

The doctrine of encroachment is generally regarded as an obscure and confused doctrine. The enigma is particularly acute where a tenant encroaches upon the landlord's other lands. In Secretary of Justice v Chau Ka Chik Tso, the Court of Final Appeal was divided as to how the doctrine may coexist with our understanding of how adverse possession normally operates. This note examines the reasons of both the majority and the minority and seeks to explain why, despite its novelty, the majority's reasoning is to be preferred. Despite the majority's hesitation, it also endorses Ribeiro PJ's rejection of the controversial "no adding - up rule" that is thought to limit the doctrine's application. In the process, it also suggests that the Hong Kong courts reflect upon some other aspects of both the doctrine of encroachment and the doctrine of adverse possession.

By a unanimous decision the Court of Appeal held in SFC v Tiger Asia Management LLC that the remedial consequences of the orders as set out under s 213 of the Securities and Futures Ordinance empower the court to definitively determine whether there has been a contravention of a market misconduct provision applicable to both Pts XIII and XIV in an abridged manner without going into the requirements and standards of proof under the mutually exclusive civil and criminal regimes.
While appreciating that the decision provides the Securities and Futures Commission with an important and valuable tool with which to protect investors, the authors are nonetheless concerned as to how s 213 can be said to have such an extensive ambit given its potential for regulatory overreach and argue in favour of a reversal of the judgment by the Court of Final Appeal.

Amid a maelstrom of international debate, Hong Kong SAR introduced its Sexual Conviction Record Check Scheme (SCRCS) designed to protect children from sexual predators. The SCRCS has a low impact as it is voluntary, excludes large categories of sexual offenses and applies only to certain high-risk professions. Many foreign jurisdictions have employed far more comprehensive initiatives and justified them on the basis of public safety. This article critiques the SCRCS under the lens of the best practices model of Australia, England and Wales and the United States. It explores the balance between public safety and rehabilitation of offenders adopted in those jurisdictions in order to gain insight for proposed changes in Hong Kong.

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Lecture

Free Speech, Reputation and Media Intrusion: British Law Reform and its Implications for Hong Kong and Beyond Lord Lester of Herne Hill QC

The balance between copyright and freedom of expression has traditionally been embedded in copyright law. The advent of the digital age, however, has broken the traditional balance. The emerging digital modes of exploitation and dissemination of copyright works have made copyright legislation increasingly difficult. Adapting copyright law to the needs of the information society not only concerns the expansion of protection for the owners, but also requires the coordination and balance of the different interests of all parties involved. The digital age has brought the debut of Online Service Providers (OSPs). By virtue of their control over the activities on their service platform, OSPs are often well placed to combat online piracy. To ensure effective cooperation from OSPs, the interests of OSPs must be taken into account in the balancing exercise in copyright legislation. Thus, copyright legislation in the digital age has to strike a proper balance between the owners, users as well as OSPs. The article explores the tripartite balance in the digital age, and in this light, seeks to assess the recently passed Hong Kong Copyright (Amendment) Bill 2011.

Hong Kong's current Copyright Bill has been criticised as a "Cyberspace Article 23". There is a fear that its introduction would hamper freedom of speech, because its all-embracing and exclusive right of communication to copyright holders leaves no room for satire or parody of copyright works. With reference to domestic and international jurisprudence, this article argues that the apparent conflict between copyright and freedom of speech is misleading because copyright's protection of the expression of ideas forms an essential part of freedom of speech. The article argues that Hong Kong's model is very unique, contrary to public perception: the Bill not only accommodates various individual rights, but also combines statutory law with a non-statutory Code of Practice to define Online Service Providers' liability through its "one regime two systems" framework. The Hong Kong model provides insight for other jurisdictions for balancing conflicting interests in adapting copyright protection to the digital era.

Rapid development and commercialisation within the emerging field of Islamic finance provide strong evidence of its sustainability. The Islamic finance industry has experienced remarkable growth, expanding into a market worth more than US$1 trillion. This consistent growth, along with the industry's proven ability to safely navigate a global recession and financial crisis while still designing innovative products, indicates its resilience and competitive edge. Hong Kong brought Islamic finance into its finance portfolio after the former Chief Executive highlighted the desire to acquire a bigger slice of the market in 2007. However, many investors, practitioners and academicians still lack a clear understanding of this new type of financing. This article explains Islamic finance and its current position in Hong Kong, together with the legal and regulatory challenges it faces. It also covers the Hong Kong Government's March 2012 consultation on proposed amendments to tax legislation to promote the development of a local Islamic bond (sukuk) market.

This article will examine the role that the International Covenant on Economic, Social and Cultural Rights (ICESCR) should play in the adjudication of public law disputes in Hong Kong. It will consider possible usages of the ICESCR as a source of constitutional rights, as an aid to constitutional and statutory interpretation and its potential influence on the development of the common law. Despite not being directly incorporated into domestic legislation, it will be argued that the ICESCR enjoys constitutional status under the Basic Law. The view that the ICESCR is merely "progressive" or "aspirational" will also be challenged as a mischaracterisation of the legal nature of the covenant, which unduly hinders its enforcement in Hong Kong courts.

In 2006, Hong Kong's Court of Appeal had to decide whether it was lawful for an employer to deliberately adopt a strategy to avoid having to make a statutory payment to an employee. The employer's liability to make that payment was contingent on the employee completing a prescribed period of continuous service. The employer engaged the employee under successive, non-continuous contracts of employment, each for a shorter duration than the prescribed period to prevent his liability for the payment from crystallising. The Court of Appeal held that there was nothing unlawful in an employer arranging his affairs so as to prevent his liability for the payment from even arising. This article analyses the case concerned and expounds how the foregoing decision could see employers avoiding a whole range of employee rights and benefits under the Employment Ordinance. The article views such conduct as negating the legislative intention and as being contrary to the norms of justice. To rectify the situation as it currently stands, we propose an amendment to the Employment Ordinance to prohibit such avoidance.

Many companies listed in China adopted anti-takeover provisions (ATPs) in their Articles of Association in recent years. Although the existing regulatory regime does not clearly address the legitimacy of most defensive tactics, the Chinese regulatory authorities implicitly allow such ATPs. This thesis reveals that the widely adopted ATPs can effectively impede potential takeovers and provide undue protection to inefficient incumbent directors and dominant shareholders. The development of an active corporate control market will be significantly delayed if such ATPs are condoned. This thesis argues that the use of ex ante takeover defences should not be allowed. A new regulatory regime for takeover defences in China is also proposed.

This article traces the involvement of lawyers in the Chinese Communist Party's united front work from the 1930s until today. It outlines the disappearance of the legal profession under Maoism, its revival as part of the economic reforms of the late-1970s and its increasing importance since. We detail how lawyers have therefore become a particular target of united front work aimed at monitoring, educating, influencing and channelling their involvement in politics in ways that minimise their potential to become critical of the Party-state system and maximise their contribution. Co-optation is secured through public recognition, as well as access to the political system and the valuable business connections this access can involve. The role of non-Party personages and the corporatist bodies underpinning much united front work, such as the All China Lawyers Association and the minor parties and groups is discussed while the role of these in the National Peoples' Congress and Chinese Peoples' Political Consultative Conference are explained and key examples provided.

This article is a critical assessment of the difficulties to conclude a bilateral investment agreement (BIA) between mainland China and Taiwan. It focuses on two paradoxes. First is the paradox between prosperous cross-strait investment and the absence of a BIA. Negotiating a BIA will help both regions to develop their regional laws and coordinate their interests. The second is the paradox between booming Mainland investment treaties and difficult negotiation with Taiwan. The question, why concluding a BIA is so difficult, is answered from four aspects with solutions: weak mutual trust, protection of investors, promotion of investment and dispute resolution.

A recent decision of the Hong Kong Court of Appeal in Gao Haiyan v Keeneye Holdings Ltd considers public policy-based procedural objections in the context of enforcement of a mainland China arbitration award that was made following the hybrid process of mediation and arbitration (med-arb). This article attempts to decipher what this case means to Hong Kong and the cross-border arbitral relations. What has changed in the playing field of public policy in the enforcement of arbitral awards in Hong Kong and what can parties expect of Hong Kong courts on public policy issues in treating Mainland arbitral awards after the Keeneye case? In light of the rising use of med-arb procedures, this article studies particularly the novel issue of public policy of enforcing med-arb awards, and analyses how the different legal practices in Hong Kong and mainland China may cause much uncertainty in the cross-border enforcement arena. It is revealed that even after unification for more than 15 years there are legal as well as ideological conflicts between the two sides. Although the Keeneye case may have, on the one hand, lowered the predictability of outcome in cases which involve a cross-border clash in ideology in the enforcement of arbitral awards, it has simultaneously acted as a catalyst in reducing such differences, as seen from the rapid Mainland reform to the rules on med-arb. In the long run, a potentially more credible Chinese arbitration system is expected to be built upon and in the course of its improvement, understanding from the Hong Kong side will be helpful for the healthy development of a cross-border arbitration scheme.